Right now the student loan refinance company offering the lowest rates on the market is ELFI, short for Education Loan Finance. ELFI has been in the student loan refinance business for less than two years, but it is the product of SouthEast Bank, a regional bank headquartered in Tennessee. While we are concerned about the limited time in the market, the fact that ELFI loans are actually a bank product gives us some comfort due to the much higher level of oversight on banks. Finance startups typically face less regulation. Because ELFI is a product of a longstanding bank and…

ELFI Refinance Review

Interest Rates

Co-Signer Release

Loan Terms

Repayment Length

83

Excellent

ELFI combines the stability of the bank with the lowest interest rates available.

Right now the student loan refinance company offering the lowest rates on the market is ELFI, short for Education Loan Finance. ELFI has been in the student loan refinance business for less than two years, but it is the product of SouthEast Bank, a regional bank headquartered in Tennessee.

While we are concerned about the limited time in the market, the fact that ELFI loans are actually a bank product gives us some comfort due to the much higher level of oversight on banks. Finance startups typically face less regulation. Because ELFI is a product of a longstanding bank and offers extremely low interest rates, it debuts at #3 in our student loan refinance rankings. As we get reader input on their experiences with ELFI we will adjust its ranking accordingly.

ELFI Basics

EFLI offers student loan refinance and consolidation for both federal loans and private loans. ELFI loans are offered in 5, 7, 10, 15 and 20 year terms. The ELFI variable-rate loans start at 2.39% while the fixed-rate loans start at 3.19%. These rates are both currently the lowest available on the market.

In order to qualify for an ELFI loan a borrower does need to have a degree and pass a credit check. Like most legitimate lenders there are no loan application fees, origination fees or prepayment penalties.

One area where ELFI is a little more strict than other lenders is that they require a minimum student loan balance of $15,000 in order to refinance. Borrowers with smaller balances should look at lenders like CommonBond and Laurel Road who require a minimum of only $5,000.

ELFI does offer a co-signer release program, but co-signers can only be released if the borrower is able to pass a credit check on their own.

Education Loan Finance Advantages

ELFI offers more than just the lowest interest rates on the market. Their call centers are all located in Tennessee and borrowers get a single point of contact with a direct number to call for support. This should make resolving any issues go significantly smoother.

ELFI student loans are serviced by Mohela, one of the few student loan servicing companies to get decent reviews.

ELFI Disadvantages

The concern we have with Education Loan Finance applies to pretty much every student loan refinance company.

Even though it makes sense for some borrowers to consolidate their federal student loans with a private lender, this move can also be a mistake. Refinancing your federal loans means you lose federal perks such as repayment plans based upon your income and student loan forgiveness programs. We look at these programs as an insurance policy. The cost of that insurance policy is higher interest rates. If you think you might lose your job or not be able to afford your student loans, it is best to keep your loans with the federal government. If you will have no problem paying off the debt, locking in a low interest rate could be a smart move.

ELFI Review Final Thoughts

The Education Loan Finance option sticks out due to the 2.39% interest rate. In close to five years of reviewing student loan consolidation companies it is the biggest gap between the lowest rate and second lowest rate that we have ever seen. We suspect it is because ELFI is relatively new to the business and an ultra-low rate will generate attention and help them grab a big share of the market.

Ultimately, advertised rates are a tiny part of the refinance equation. What really matters is the rate you qualify for. Because ELFI combines the stability of a longstanding bank with very low interest rates, it is a lender worth serious consideration.

Beware of this unethical lender. Their site states they do a soft pull (“doesn’t impact your credit score to check your rate”); however instead they do an unauthorized hard pull. (Note, this is not mentioned in any of their disclosures) So despite what they say even looking at your rate with this lender WILL HURT YOUR CREDIT SCORE. AVOID THIS ONE!

Thanks for sharing your input. Did you just do a rate check with ELFI or was it further along in the process that they did the hard pull? Have you disputed this with the credit bureau or does it not matter because other lenders had to do hard pulls as well?

I recently had a similar experience with the credit pull before I authorized it. I went ahead and continued with the application since they pulled my credit without my permission. I was declined with a 773 FICO Score. When I called they didn’t have any explanation. My wife was also declined on her student loans refi from ELFI as well. Her credit score was a 743. Seems like this is a new company and that are very picky on who they lend to.

Francis

They are EXTREMELY picky. They went as far as needing my monthly mortgage (even though Im married and my husband pays for it), they couldnt account for any of my husbands income because they claimed to need a worst case scenario for my debt to income ratio if I were to divorce! And even though the initial assessment of my rates and options were extremely good, at the point when the actual underwriters analyzed my REAL options, they denied many of the lowest rates that I had initially been potentially offered. With my credit score above 800, they were still able to offer me a rate lower than the competition so I’ll stick it out

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Michael Lux is the founder of the Student Loan Sherpa. He is an Indiana attorney who knows first hand how frustrating it is to deal with student loan servicers and massive bills. He created the site to help other student loan borrowers navigate the complicated world of student loans.

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